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RMD Timing

For Traditional IRA funds making distributions, is there any advantage to taking the RMD before/after the distribution date?


  • Distributions don't matter in tax-deferred accounts. Take RMDs based on other factors/preferences.
  • beebee
    edited December 2021
    This year's RMD is based on 12/31/2020 ending balance. So let's say that prior to December 31st, 2020 you took distributions for income. Those T-IRA distributions would have lowered your 2020 end of year T-IRA balance impacting your RMD calculation.

    I am assuming you are referring to ST/LT capital gains distributions which often happen in December. If those distributions remain in T-IRA status then I would say, "no, there is no advantage".

    This article might be of help:
    Required minimum distributions (RMDs) are calculated off of last year’s end of year value and need to be taken out by the end of the year. That means you could take the RMD out as early as January 1st or as late as December 31st, but when should you?

    There are a lot of differing opinions when it comes to this question. Most articles on the subject definitively say either “you should take it early in the year” or “you should take it late in the year” with no qualification and not much justification. In reality, the answer is: it depends.
  • I used to be in take-RMD-early camp. But then 2020 happened. When the RMD was reversed at first, it didn't apply to me because I took it too early. But later, it was reversed to include everybody and I took advantage of it. And I also joined the camp of take-RMD-later (Nov/Dec). So, this year, I took it in November.

    But potential yearend CG distributions had no impact on my timing.

    Of course, if you are planning to do Roth Conversions, then take care of RMDs before that.
  • yogibearbull +1 I also got trapped in 2020 & decided not to reverse RMD . It cost be around $900. Live & learn, Derf
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